Starting or Buying an Insurance Agency
COJOE
subscriber Posts: 7
I am seriously considering leaving the Corporate World (have been trying for years....) to buy or start an Insurance Agency. Yes, not the most exciting business in the world, but my overall sales acumen probably fits the mold fairly well. Plus, I would really like to get into Financial Planning for those who really need that type of help. There are TONS of people who need help with that type of service in their everyday life and this would offer me the ability to be more independent, be at home with the family, and build equity in my own business.
Does anyone have any feedback, thoughts, or resources I should consider ??
Does anyone have any feedback, thoughts, or resources I should consider ??
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In Response To COJOe--starting an Insurance Agency
My husband has been an Independent Agent for almost 30 years. We have an agency wherein I do the customer service (I`m also licensed). Our field of expertise is Life, Health and Annuities (non-variable)...most of our clients are small businesses. My husband also went into partnership with a P & C agent and that has worked out pretty well. It is tough getting your own agency going as an Independent Agent. Commissions are the only form of income, and that can be very tricky until you have residules coming in. And even then, residules aren`t what they used to be, and you could not expect to survive on them even in their second year. You must continously write new business (Life) to get the good commissions. Small group health, on the other hand, pays the commissions monthly (7 years ago all carriers in Florida reduced the amount of commission paid to agents and it almost broke us!). We have been establishing this particular agency for 18 years, and we have built a pretty substantial book of business through health care, but it is still a tough job each day. No one pays for your health insurance, or any of your supplies. Some people are cut out for Independent Agencies and some are not. There are carriers --American General is one possibility that used to help their agents--that will help set you up with training, etc. and in some case they provide supplies (not health coverage)...You probably know this already. As for Financial Planning, you must have your Series 6 (and preferrably Series7) to sell any type of variable product, otherwise you`re wasting your time as FP. An agent can make a good living, if you can withstand the hardships while building a book of business. Hope this helps...any questions, I would be happy to try and answer.YSDJ2007-1-29 17:40:9
The insurance business is stagnant. Consider this, the majority of the market is "aging out" of life insurance. There are some sophisticated applications to protect and pass on wealth where it works better than anything, but those cases do not come along that often. Providing guaranteed income with annuities is the way to go both for your client and for you. You would need a securities license to do variable annuities, they do not work as well as one would hope as retirement vehicles.
Have a larger than normal nest egg to get you through start up. You will need to spend 35-40% marketing yourself and your agency and it takes time to build a reputation. It can be rewarding but the average insurance agent makes $55K per year. Try to get on with a bank to be an inhouse rep. They train you and bring you the fish in a barrel. I mean customers, yeah...
Don`t mean to discourage you just want you to have a good grip on reality before you make the leap. It can be a long way down before the first branch appears growing out of the cliff. And creditors do not have a sense of humor.
I am the one who they always talk about in the meetings at the large insurance companies who was hell bent on doing great things but let the free time eat me alive. I worked for Western-Southern Financial in Fort Wayne,IN. They are a good company and have excellent ratings. But the downside is, have YOU ever heard of them. Most had not so that hurt our sales. But the biggest piece of advice that I would give you is to manage your time!!! I did not, so as you could tell am not in the financial planning of it.
Another thing that I found hard is the trust factor. Many of these people are putting there after lives so to say in your hands. Some have had bad experiences with other agents <either left the company/went out of business/or just plain took their money>. Not saying that you will do any of these because you sound as though you have a level head and are great as sales.
I hope you do well. I do have a friend who does a great job and makes triple what I do. But that industry is not for me.
Surely you would have a big and bright idea but there is competition that you'll have to face and without good planning and a business plan market know how you could be in for a rough ride. You would also do well to rope in some people with 3 or more years of experience and contacts in this business.
Johan
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Kimberly from Dallas Texas
I can recommend that if you are going to re-sell third party services you do the following. I have seen this plenty of times so..
Avoid their image, sell their services, but at all cost create a brand for your own company and market it non-stop. Why? association, people will associate good customer service with your image (your company's image that is). Yours is a service, so if you already know your stuff this is pretty much all I can recommend
Best of lucks,